Theranos Founder Elizabeth Holmes Convicted of Defrauding Investors in $9 Billion Fraud Scheme

A federal jury convicts Theranos founder Elizabeth Holmes on one count of conspiracy to commit investor fraud and three counts of wire fraud involving over $140 million in investments. The conviction follows a nearly four-month trial where prosecutors presented testimony from 29 witnesses demonstrating Holmes intentionally deceived investors about Theranos’ blood-testing technology capabilities. Holmes was acquitted on patient-related fraud counts, with jurors deadlocking on three additional investor fraud counts.

The case represents a landmark prosecution of Silicon Valley fraud and regulatory capture. Holmes exploited FDA regulatory loopholes by classifying Theranos technology as ’laboratory-developed tests’ to avoid pre-market review, enabling years of patient harm and investor deception. Despite red flags including lack of peer review, absence of published clinical validation data, and whistleblower complaints, securities regulators failed to investigate until after the Wall Street Journal’s 2015 exposé. The conviction exposes systemic failures in medical device regulation, where government inspectors repeatedly failed to uncover compliance problems despite multiple facility inspections. Holmes raised over $700 million from sophisticated investors including Rupert Murdoch, the Walton family, and DeVos family by making false claims about technology that never worked, exemplifying how regulatory weakness enables tech industry fraud.